Hot Topics:

Stand Out in a Competitive Market

8 steps to help you set your products apart

With online retail sales projected to reach $250 billion by 2014, there’s no doubt the e-commerce landscape is a competitive one. For independent online merchants, competition is a fact of life, no matter what you sell or where you sell it.

Whether you’re an established seller or a startup, knowing how to set your business apart from the competition will positively impact the growth of your sales.

Unfortunately, many business owners don’t pay close enough attention to this issue. As a result, they end up with mediocre sales or a business that never gets off the ground.

Focusing on products and pricing alone will not give you the competitive edge. Market differentiation involves a series of steps which, when correctly implemented, will not only give you the competitive edge, but position your store as a destination site online!

Here are eight steps to help you establish a unique presence in a competitive marketplace.

1. Embrace competition

The first step comes in acknowledging and embracing the competitive nature of the online marketplace. This may seem obvious, but you’d be surprised at how much energy online sellers invest in wishing the competition would disappear. It won’t (and neither will you), so it’s time to accept and embrace that competition is here to stay. And learn how to use it to your advantage!

Until you know who your customers are, it’s impossible to position your products differently than your competitors’

2. Know your customer

Create a profile of your ideal customer. What are their interests? Values? Demographics? If you sell apparel online, are your target customers upper-income women who buy classic styles, name brands and conservative colors? Or are they middle-income women who love retro-vintage chic?

Do the men who buy your bicycles and accessories online value variety at mid-range prices, or are they looking for expensive designer bikes with European styling and imported accessories? Until you know who your customers are or who you want to attract, it’s impossible to position your products differently than your competitors’.

3. Stop trying to be everything to everybody

Often online retailers are afraid to narrow down their target market for fear of losing prospective customers. I frequently hear people say, “My target market is anyone who shops online.” The problem is that you can’t market to “anyone.” You need to identify your ideal customer so you can create a marketing message that will appeal to exactly the customers you want to reach.

4. Define your unique selling position

Now that you’re ready to compete and you know who your customer is, it’s time to decide how you’re going to present your business online. This is called your Unique Selling Position, or USP.

Often, online sellers start a business without giving any consideration to their USP. Others have crafted one so vague that it blends in with a thousand other Web sites. A USP clearly defines and describes what sets your business apart from the competition and how you deliver on that promise.

Not knowing your USP can lead you to source poorly targeted products and market your business in the wrong voice. Without a USP, you easily become a commodity seller.

Zappos could have been just another shoe store. But right from the beginning the company created a strong USP. Zappos CEO Tony Hsieh explained in a 2006 Inc Magazine interview: “We all sat around one day talking about what we wanted the Zappos brand to represent. We decided to be about providing the best service; we said, ‘We’re a service company that just happens to sell shoes.'”

This USP not only defined the company’s mission and drove its business decisions, it also went on to generate more than $1 billion dollars in sales for Zappos in 2009.

Quick tip: Identifying your USP

While you may not want to build a business as big as Zappos, you still need to spend some time creating the right USP. Here are three tips to help you identify your business USP:

  • What is the most important differentiator in your business? Blue Nile built its diamond jewelry business on this USP: “Choosing an engagement ring doesn’t have to be complicated. Diamonds can be simple to understand.” Meanwhile, competitor Brilliant Earth sets its diamonds apart by stating that they originate “from pure sources and [are] harvested using socially responsible practices.”

  • Be specific. Saying “We’re No. 1” or “Dedicated to customer service” does not equate to a good USP. Too many companies have promoted these to the point they have become meaningless. Urban Garden Solutions isn’t the top garden products Web site, but it is the place to go when you’re looking for gardening solutions and products for small urban spaces.

  • Can you deliver on this USP? If your store boasts the broadest selection of name brands or hard-to-find specialty items, and you only offer one or two items per category, your choice of this USP will backfire. You must be able to deliver on your USP every day. Moosejaw sells outdoor gear found in many other stores, but it delivers the buying experience with a USP of humor, and they do it every day.

5. Creative content marketing

Once you have a clear idea of your USP, there’s no better way to promote it than through the use of content marketing. Content marketing is marketing with information your target audience will find helpful and relevant to the products you sell.

There are many ways to use content marketing to give your business the competitive edge.

For example, if you sell energy-saving devices for the home, create content that speaks to the issues your target audience cares about. It will help customers arriving at your site to purchase the right products to meet their needs. Because your content is unique, it will automatically distinguish your site from your competitors’. Content can be in written format, audio or video.

Content marketing is the secret sauce that positions your marketing, products and business in a unique light.

6. Be fast, flexible and try new things

Unlike big-box e-tailers, small online sellers can run a promo or create a new marketing campaign at will

As an independent online retailer, you have the advantage of being able to move fast and be flexible. Unlike a the big-box e-tailers that are bogged down by red tape and bureaucracy, small online sellers can run a promo or create a new marketing campaign at will.

Need some back-to-school buzz? Run a “What I did on my summer vacation” essay contest, and award the winner a free backpack. Distribute a press release about the contest. Get picked up on back-to-school blogs. Put up a special Facebook page. While your competitors are sitting around marketing with the same old techniques, you’re being bold, innovative, fast and flexible in your approach.

7. Offer exclusive product sets

This is, by far, the most underutilized opportunity for small- to medium-sized online sellers. By utilizing your own market research, as well as input from customers, you can configure your own product sets based on your customers’ needs.

For example, a large mainstream Web site might sell a dish set in eight-piece sets. You can reconfigure your inventory to create a customized package that only you offer.

8. Provide solutions, not products

Today’s consumers like to buy complete solutions. They don’t want buy individual components and then have to try and figure out how to use all the parts and pieces. When you provide a complete solution that your competitor doesn’t provide, you now have a 100-percent unique product.

Instead of selling craft supplies piece-by-piece, put together a kit with instructions, and give it a unique name branded with your company logo. You instantly have a product that your competitor doesn’t have. What should you do if your competitor copies you? No problem! Come up with your next creative solution.

Above all, be proactive and not reactive when it comes to setting your products and your business apart. A little extra thought and effort goes a long way where product differentiation is concerned. Most of your competitors won’t go the extra mile. Take the lead by taking action and make your site a unique destination site on the Web today!

About the author

Lisa Suttora
Lisa Suttora is an internationally known e-commerce expert, internet marketing strategist and veteran trend spotter. As founder and CEO of, Suttora has helped thousands of enterprising entrepreneurs build successful, niche-based online businesses. Since 2004, has provided premier education and a global community for online retailers. To get the latest on hot product niches and trends, subscribe to Suttora's free trend sheet Hot Trend Alerts. Suttora also has a 15-day e-course to help sellers make money on today's eBay. Opinions expressed here may not be shared by The Online Seller and/or its principals.

Newsletter Signup